Asus will ship fewer netbooks in the third quarter of 2010, as sales of the low-power, low-priced machines have dropped due to strong competition from the Apple iPad.

Speaking at an investors conference, president and CEO of Asustek Computer Jerry Shen said his company will ship 1.4 million units in the next quarter, a lower number for its peak sales period. The slowdown in netbook sales is "mainly due to competition" from the iPad, according to DigiTimes.

The company now expects to ship just 1.4 million netbooks in the third quarter, less than the 1.5 million it shipped in the second quarter of 2010, or the 1.6 million to start the year. Asus will launch a new 10-inch netbook running Windows 7 for $399 in September, followed by an 8.9-inch tablet running Linux and powered by an ARM processor for between $199 and $299 in October.

Asus has become one of the top PC makers in the world based on the strength of its netbook sales. In the June quarter, it shipped enough computers to make it the fifth largest PC maker in the world.

Apple's iPad has been viewed as a netbook competitor, and even positioned as one by Apple. When the iPad was first unveiled in January, Apple co-founder Steve Jobs directly compared it to existing netbooks on the market, noting that he felt the new product was lighter and more useful than low-cost netbooks, which he said are just "cheap laptops." With a 9.7-inch display and weighing just 1.5 pounds, the keyboard-less, touchscreen iPad is a much different form factor from the traditional laptop.

When including the iPad in total portable computing sales, Apple vaulted past Asus and others, according to estimates released earlier this month. The iPad sold 3.27 million units in its first three months of availability.

That is a real slow down considering we are entering the holiday buying season.

Yeah! I am curious what the final tallies will be after the holiday quarter concludes. Asus' speculation on future sales and the reason for the drop in sales is expected, but its still just speculation.

PS: If one really wants a netbook Asus is the way to go.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

With multimedia, etc, these netbooks are not optimized for these functions. So it is a choice between a powerful - and heavy laptop versus a iPad. Then there is the issue of apps. The big question is what will be the effect of all these Android pads... they got so many announced that it is hard to keep track. Many have little storage capacity, but very affordable.

Anyway, it is a matter of time, but Apple will add a camera - or two - to the iPad. With Facebook, iPhone 4, I am just surprised they did not include them... not too expensive for OEMs.

Surely though some of these PC Netbook are powered just fine?? I have a couple of blogger friends who use them (mainly in wifi free cafe's) to produce video blogs, video uploads / edits etc...and they also use the built in camera for creating some of these video blogs too...

I never hear them complaining that their Netbooks are underpowered etc...and they can actually import and edit video - unlike me on the iPad! Perhaps they didn't just spend $500 though??

Are all netbooks garbage really - if you don't mind the small form factor?

The problem is netbooks have been on the decline for well over a year now. The iPad may be a contributing factor, but this was bound to happen regardless. The effect netbooks have on the market is driving down the cost of full fledged PCs. Notebooks have come so far down in price, they're able to compete at a $400-600 level while maintaining a "full-sized" notebook performance compared to a limited-performing netbook.

Its not like ASUS is hurting, however. They will continue to sell machines and do well to be within the top 5 PC makers in the world. Besides, I think all of these manufacturers would love to get out of the netbook game. Margins are so low on the components and builds that they almost make no money selling them.

Surely though some of these PC Netbook are powered just fine?? I have a couple of blogger friends who use them (mainly in wifi free cafe's) to produce video blogs, video uploads / edits etc...and they also use the built in camera for creating some of these video blogs too...

I never hear them complaining that their Netbooks are underpowered etc...and they can actually import and edit video - unlike me on the iPad! Perhaps they didn't just spend $500 though??

Are all netbooks garbage really - if you don't mind the small form factor?

The best computer is the one that suits your needs, but Id say that most people will be frustrated and annoyed with netbooks because of the shrunken keyboard and relative performance. And by relative speed, I mean the speed the user experiences, not the speed of the HW.

Netbooks are faster than the iPads processor and have more RAM, but they use a standard desktop OS on this HW that pales in comparison to even $400 notebooks when it comes to performance, capacity, and usability. Only on portability does the netbook win over a standard notebook, unless you get a good one with a long battery life.

Contrast to that, the iPad uses an OS that is both designed for the HW so it feels fast to the user and the UI is designed for the display dimensions, not shoehorned Ive owned two, one with WinXP and another with Mac OSx86. Neither of these desktop OSes look or feel right on a 10 display, not to mention they are usually the cheapest TN displays on the market, unless you go with Asus.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

What's the pricing difference though? To me most average notebooks are still a few hundred cheaper than the iPad. I haven't looked closely at notebook prices for a while though because all those Windows stickers hurt my eyes!

With multimedia, etc, these netbooks are not optimized for these functions. So it is a choice between a powerful - and heavy laptop versus a iPad. Then there is the issue of apps. The big question is what will be the effect of all these Android pads... they got so many announced that it is hard to keep track. Many have little storage capacity, but very affordable.

Anyway, it is a matter of time, but Apple will add a camera - or two - to the iPad. With Facebook, iPhone 4, I am just surprised they did not include them... not too expensive for OEMs.

I think you are wrong. Some are better optimized than you can imagine and way better than iPad. Check Asus Seashell. Can you play HD content on iPad? On ASUS 1201N Seashell you can as it is ION based with dual core hyperthreaded (4 threads) Atom N330 and it has rather large nice screen (12 inch) plus USB, Ethernet e.t.c.

Even though I am big fan and user of Apple computers and other products from them I think I pass on iPad until it gets mature... and stops being locked to AT&T or what kind of extensions I can connect to it. It may never happen (including "being mature" as I do not consider crowd going after some gadget a factor of being mature as opposed to some analysts).

I think I might rush to get that Seashell.

I heard someone on office elevator who was uncomfortable with large laptop so I told her that she may need a netbook and she said: "I need my iPad!". So I asked her: "So what productivity applications can you run on iPad?". I heard lowered voice: "You are right, I need a netbook". Even if Apple comes up with MobileMe/Internet document and productivity suit, it will take a lot of time to be fully featured and working the way one needs to work while in office or on the road. No "basics only" accepted here.

On top of that: can you really upload your pictures to storage and manage them with iPad? Really? I am looking for something more advanced... just like Aperture or full Photoshop. I guess netbook would work better anyway.

The problem is netbooks have been on the decline for well over a year now. The iPad may be a contributing factor, but this was bound to happen regardless. The effect netbooks have on the market is driving down the cost of full fledged PCs. Notebooks have come so far down in price, they're able to compete at a $400-600 level while maintaining a "full-sized" notebook performance compared to a limited-performing netbook.

Its not like ASUS is hurting, however. They will continue to sell machines and do well to be within the top 5 PC makers in the world. Besides, I think all of these manufacturers would love to get out of the netbook game. Margins are so low on the components and builds that they almost make no money selling them.

Problem is size. Minaturization costs and it has its own problems.

I prefer small netbook that is about notebook price(or $100 less only) with high quality/resolution screen, than bulky piece of paddle to handle when on my way.

Even in the office or at home I prefer small footprint desktop/nettop than disproportionate screen-to-keyboard-wise permanently bonded/hinged two piece hardware. Do you really feel comfortable with notebooks? When did you work with desktop and large screen that you can put into proper distance from your eyes and hands last time? Perhaps you adopted some sort of misery. I do not.

But, but, but, but, but..... no one will ever buy an iPad. It doesn't have a USB port, customer acceisble file system, or Flash, so it's worthless.

Asus must be mistaken.

At one point I said that I couldn't see myself using an iPad. I went ahead and bought one anyway, the 16 gig 3G. I bought an Apple case, a bunch of apps, games and a month of wireless. But it turns out I was right. I really don't use it very much. I have to force myself. Oh well, it's pretty and all but not that useful. I also have an iMac which I use all the time. And an iPhone for on the go. How do other people use it?

At one point I said that I couldn't see myself using an iPad. I went ahead and bought one anyway, the 16 gig 3G. I bought an Apple case, a bunch of apps, games and a month of wireless. But it turns out I was right. I really don't use it very much. I have to force myself. Oh well, it's pretty and all but not that useful. I also have an iMac which I use all the time. And an iPhone for on the go. How do other people use it?

What's the pricing difference though? To me most average notebooks are still a few hundred cheaper than the iPad.

It doesn't appear that the price difference matters. Netbooks are cheaper than iPads and PC manufacturers saw demand weakening even before the iPad's debut.

The netbook market had plateaued and even a more expensive option like the iPad appears to be eating away market share. Netbooks have always exhibited a very high rate of customer returns which shows that many people simply aren't happy with them regardless of the price.

That said, there will always be a small market that find netbooks useful for a limited set of tasks. The fact that performance increases and yet there is less interest in netbooks isn't a particularly ringing endorsement from Joe Consumer though.

It doesn't appear that the price difference matters. Netbooks are cheaper than iPads and PC manufacturers saw demand weakening even before the iPad's debut.

The netbook market had plateaued and even a more expensive option like the iPad appears to be eating away market share. Netbooks have always exhibited a very high rate of customer returns which shows that many people simply aren't happy with them regardless of the price.

That said, there will always be a small market that find netbooks useful for a limited set of tasks. The fact that performance increases and yet there is less interest in netbooks isn't a particularly ringing endorsement from Joe Consumer though.

I think you're right... in fact you've made two good points it's not about the cheapest possible price and it's definitely not about the performance and specs. If it does the job well at a fair price that is what the consumer wants.

iMac never shuts down only sleeps. Yeah I know I am wasting energy, maybe, but I have better luck just letting it run rather than booting up and shutting down. I think it is less prone to hardware failure, although I don't have any evidence to support that.

But about the iPad, I find it difficult to hold for a long period of time. My wrist gets sore and on the lap is the wrong angle.

At one point I said that I couldn't see myself using an iPad. I went ahead and bought one anyway, the 16 gig 3G. I bought an Apple case, a bunch of apps, games and a month of wireless. But it turns out I was right. I really don't use it very much. I have to force myself. Oh well, it's pretty and all but not that useful. I also have an iMac which I use all the time. And an iPhone for on the go. How do other people use it?

I work out of the house and spend the work day in front of my MBP 17" which is hooked up to 3 monitors. That is located in my home office upstairs.

That being said, once the day is done, I seldom use the MBP. I do have a 21" iMac downstairs that my wife uses, but I seldom do much on it.

For the most part, I use the iPad for most non-work activities unless there is something that I can't do on the iPad.

When it came out I bought 1 64 GB wifi model which my older son claimed. (He lives 60 miles away in a college town while going to school). I was pretty doubtful about it at the time, and didn't think we'd get much use out of it since after all we have 2 iMacs and one MBP in the house.

I was wrong. Ended up getting a 2nd iPad and my younger high school age son and I use it all the time - him mostly for games, and me mostly for reading news and books. I like that I can take it bed with me - if the young 'un hasn't beaten me to it.

My wife uses her iMac for web-surfing and email, but has no interest in either iPhones or iPads.

We also have 3 iPhones - 1 iPhone 4, 1 3GS, 1 3G. I guess you can call us fanbois.

At one point I said that I couldn't see myself using an iPad. I went ahead and bought one anyway, the 16 gig 3G. I bought an Apple case, a bunch of apps, games and a month of wireless. But it turns out I was right. I really don't use it very much. I have to force myself. Oh well, it's pretty and all but not that useful. I also have an iMac which I use all the time. And an iPhone for on the go. How do other people use it?

Well I know I've shifted all my casual internet/email/YouTube routine from my mbp to my iPad since i got it. That includes picking it up at least 5 times a day to do a quick round of my favorite websites and a quick e-mail check, for starters. Then there's the looking up of all kinds of stuff: wikipedia, imdb, english dictionary (I'm not a native speaker but I read a lot of english books), tv guide. I used to do some of these on my laptop if it was on, or on standby, or just forgot about it when it was turned off. The iPad made the internet almost instantly accessible for me which makes it worthwhile to quickly lookup stuff, show someone a youtube video, or stay up to date on 10 different sites. Last but not least I use it a lot to ssh into my home server to do maintenance and monitoring stuff. None of all this is critical and none of it is impossible on a laptop or desktop (I also have an iMac for development stuff), but all of it is much faster and more enjoyable than having to boot my computer, sit down, use it for 5 minutes, then shut it down again. The iPad is literally within an arms reach most of the time.

I don't use the iPad a lot for games or other very specific stuff because the apps are still a bit lacking, but for all the other stuff I do online it's more accessible than a laptop and more convenient than a phone. For me, the iPad definitely found its use, in fact I'm typing all this on it :-)

The problem is netbooks have been on the decline for well over a year now. The iPad may be a contributing factor, but this was bound to happen regardless. The effect netbooks have on the market is driving down the cost of full fledged PCs. Notebooks have come so far down in price, they're able to compete at a $400-600 level while maintaining a "full-sized" notebook performance compared to a limited-performing netbook.

Its not like ASUS is hurting, however. They will continue to sell machines and do well to be within the top 5 PC makers in the world. Besides, I think all of these manufacturers would love to get out of the netbook game. Margins are so low on the components and builds that they almost make no money selling them.

I've always thought of netbooks as being a bad idea all around. Now, there may be good netbooks out there, but the ones I have seen are crappy. Even ones by name brand manufacturers such as Dell and HP.

I have had a number of friend who have bought these largely because they were cheap had unreal expectations and were disappointed. The manufacturers have very low margins, and to make matters worse it cannibalizes some of their more profitable notebook sales. What do they get for that trouble? A diluted brand name from the customers who typically don't think about how little they paid, but how crappy the machine is.

I'm not sure that companies like Asus are not hurting. Yes, they sell lots of computers, but their profit margin is in the 3½ % range. Not much room for error.

Have you seen people you know switch to Apple products? I have. Even long time Windows users who would not have considered it just a few years ago and buying iPhones and iPads in droves. I think that partly Apple has executed very well, making lovely products, but partly that PC makers in the race for the bottom have diluted the value of their own brandnames by putting out cheap low quality products.

iMac never shuts down only sleeps. Yeah I know I am wasting energy, maybe, but I have better luck just letting it run rather than booting up and shutting down. I think it is less prone to hardware failure, although I don't have any evidence to support that.

But about the iPad, I find it difficult to hold for a long period of time. My wrist gets sore and on the lap is the wrong angle.

You need a case, if you don't already have one. I find the Apple's case dramatically improve my enjoyment of holding the iPad than when it's bare.

Congrats Apple. With that said, I feel for the early adopters when they release the iPad 2 with a webcam and probably more memory and possibly more hhd space will be annoyed at buying a product that will be so far behind in one year or less (iPhone > iPhone 3G), but those are pains of buying first gen I guess. Webcam, more memory and hdd space - that's what I'm waiting for.

Congrats Apple. With that said, I feel for the early adopters when they release the iPad 2 with a webcam and probably more memory and possibly more hhd space will be annoyed at buying a product that will be so far behind in one year or less (iPhone > iPhone 3G), but those are pains of buying first gen I guess. Webcam, more memory and hdd space - that's what I'm waiting for.

Why? Of course there will be a new model coming out next year. There always is. It may have more features that add on to the current model. Sure. One expects that. Not a big deal. By the time the new model comes out, early adopters will have had theirs for a year.

Does the new model do something so compelling that one has to upgrade? Maybe, maybe not. One can upgrade or just stay with what you have.

The one year cycle is not a bad thing.

I feel for the guys who buy Android phones, which are topped 3 weeks later. And they have to hope that the manufacturer does not decide to blow off OS f/w updates for the phone you have because they have so many new models that they are working on that take priority over something they have already gotten their money from, and has essentially gone end of life.

I heard someone on office elevator who was uncomfortable with large laptop so I told her that she may need a netbook and she said: "I need my iPad!". So I asked her: "So what productivity applications can you run on iPad?". I heard lowered voice: "You are right, I need a netbook". Even if Apple comes up with MobileMe/Internet document and productivity suit, it will take a lot of time to be fully featured and working the way one needs to work while in office or on the road. No "basics only" accepted here.

Maybe she had not heard about iWork. Maybe you haven't heard about it either.

Quote:

On top of that: can you really upload your pictures to storage and manage them with iPad? Really? I am looking for something more advanced... just like Aperture or full Photoshop. I guess netbook would work better anyway.

Yes, really. Of course you can always come up with a personal definition of "storage and manage" that blows out just about anything short of a high end desktop, but if the comparison is a fair one, then the answer is yes.

I've always thought of netbooks as being a bad idea all around. Now, there may be good netbooks out there, but the ones I have seen are crappy. Even ones by name brand manufacturers such as Dell and HP.

I have had a number of friend who have bought these largely because they were cheap had unreal expectations and were disappointed. The manufacturers have very low margins, and to make matters worse it cannibalizes some of their more profitable notebook sales. What do they get for that trouble? A diluted brand name from the customers who typically don't think about how little they paid, but how crappy the machine is.

I'm not sure that companies like Asus are not hurting. Yes, they sell lots of computers, but their profit margin is in the 3½ % range. Not much room for error.

Have you seen people you know switch to Apple products? I have. Even long time Windows users who would not have considered it just a few years ago and buying iPhones and iPads in droves. I think that partly Apple has executed very well, making lovely products, but partly that PC makers in the race for the bottom have diluted the value of their own brandnames by putting out cheap low quality products.

Just my 2 cents. Feel free to disagree.

The only part I disagree with is the idea that cheap notebooks 'diluted' the value of their brand names. People don't go, "Man, this Mini 10v makes me never want to buy a Dell again." No, they say "Man, this netbook sucks. I'm going to get a real computer instead." I think the average consumer doesn't care who made the netbook, only that they realized perhaps it wasn't for them or they should have saved up and bought something with a bit more power.

Me? I've owned an iPhone for two years (though I'm switching to the Droid X soon), and thought about getting a 13" MacBook Pro. But I realized that I could save a good $700 and buy a really nice, gamer-friendly Windows 7 laptop and be just as happy with it. They have a nice screen, tons of storage space, better-than-average battery life, and still cheaper than a 64gb iPad.

So perhaps ASUS is feeling competition from the iPad in there netbook sales, but frankly speaking, if you bought an iPad, you already either don't want a netbook or were disappointed by one. Its not even in the same market or category, really, given the price difference.

I feel people are just fed up with low-performing, cheap computers. They want a real computer instead. That's hurt netbooks more than anything in the last two years. The iPad is just the icing on the cake.